• Upbeat US GDP data, which showed a 1.4% growth in 4QFY15, trumping the Bloomberg consensus forecast of 1% should give a boost to risk sentiment in the near term while stock markets in Hong Kong, Australia and Europe will remain closed today for Easter holiday.
• Foreign investors switched to heavy net sellers of Thai shares last Fri. In our view, what needs to be closely watched is whether foreign selling spree will continue after cumulative foreign inflows into Thai stocks from Feb to mid-Mar nearly reached Bt20bn and the recent fading momentum in foreign inflows raises the risk of possible further foreign profit-taking.
• Despite bullish overseas sentiment, Thai stocks may see more range-bound trading today after the SET index has now traded at 15x FY16 forward P/E. It seems to us that Thai stocks could be headed for a possible retest of a key 1400-point barrier before trading in a range of 1380-1400 points today.
• Short-term strategy: As current market valuation is no longer cheap, selective and government policy plays seem to be good trading bets in the near term. Equity holdings should remain capped at 80% of the portfolio with the following key investment themes to play today:
(1) Tourism recovery play: Hold onto AOT shares on speculation of more progress in the 2nd phase expansion of Suvarnabhumi Airport after the opening of the bid for construction of the Bt14.2bn midfield satellite concourse building last Wed.
(2) 4Q earnings play: Take profits in short sell positions in TTA.
(3) Selective play: Hold onto IVL shares.
(4) Government policy play: Hold onto LPN shares on view that it would be the biggest direct beneficiary of the government’s low-cost housing scheme under the Pracha Rat initiative.
(3) Selective play: Hold onto IVL shares.
(4) Government policy play: Hold onto LPN shares on view that it would be the biggest direct beneficiary of the government’s low-cost housing scheme under the Pracha Rat initiative.
Source: poems.in.th / settrade.com
